Working as an international teacher and wondering what to do about your pension?

When I first left the UK, I was advised by an older and respected colleague to do no more than two years of teaching outside of the UK before returning, if I wanted any hope of being able to work as a teacher again in the UK.

I am not so sure how true this advice is (I guess time will tell – I have been living outside of the UK since 2012) and it also assumes that I want to work in the UK as a teacher in the future, but it was one comment of many about the perils of leaving teaching in the UK to work overseas.

Another comment concerned pensions. This was from an older colleague, who had retired a few years previously but was continuing to work at the school in an administrative (UK sense of the word not US) capacity. This colleagues expressed shock that I could give up my UK teachers pension. I was reticent to point out that at my age at the time, I was unlikely and indeed, definitely not going to get the same pension deal from the government that teachers of his generation did. This was in 2011.

I am and always have been concerned about my financial future. Partly, it comes from my particular family background. My parents encouraged me to work from a young age (my first job was at McDonalds at 15 and I held steady work all threw 6th form and university) and they encouraged me to save. They have also reached their 70s without pensions and are still having to run their business, but that is another story.

Nevertheless, while I would dispute that it is worth making entire life choices based on the UK teacher pension (particularly in it recent forms), and would clearly stress that leaving the pension scheme should not stop anyone from leaving teaching in the UK, the comment haunted me for a few years.

Each country is different, obviously. And financial arrangements for school-teacher pensions are diverse between and within different schools.

Working in Switzerland I was paid a decent pension in line with Swiss labour law by both the schools that I worked at. I am not going to get into technicalities here, but the Swiss pension system works on their “three pillars”. Pillar 1 is the equivalent of national insurance in the UK, Pillar 2, is a private pension provided by employers and employee and Pillar 3 is the equivalent of tax-free ISA savings. The first two are mandatory and so if you are working in a school, your employer will be contributing to these. So you are covered.

In China there is no such provision for foreign teachers. So my school does not hold a pension scheme for me or pay directly into a scheme for me. Therefore if you don’t take care you could end up spending more money that you should. Clearly without a pension fund, I need to be saving for my retirement myself. although I am paid a contract completion bonus.

In addition to this, once you have had several employers in several different countries you may end up with pots of pension money all over the place. Another problem arises from the questions of how best to keep track and potentially amalgamate all these different pools.

For a long time I have wondered how I would manage the pension issue. It began to seem quite complicated and I don’t have the kind of money to pay someone to manage this for me.

And then I met Andrew Hallam. Well not quite, he presented at my school in 2015. After listening to his talk and perusing his blog I decided to buy his books. Like most of my book purchases, I wasn’t disappointed. They are a gold mine for any teachers wondering about what to do about their finances.

I’m not going to go into the details as you can read that yourself but suffice to say that the books provide a solid model for anyone thinking about retirement planning and achieving financial independence, without the need for being a millionaire and having to rely on the role of ‘expert’ financial advisers.

For any teachers who are considering working overseas and are concerned about what this would mean for their retirement and pensions as well as any teachers who are already working overseas and are wondering how to ensure that they can achieve financial independence in retirement Andrew Hallam’s books, Millionaire Teacher and Millionaire Expat provide a lot of practical ideas that will help you navigate the murky waters of international personal finance on a teachers salary.